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U.S. grains: Soybeans firm on South America weather worries

Wheat stays firm as tighter Black Sea supply in focus

Chicago | Reuters — U.S. soybean futures rose on Wednesday on worries about poor crop weather reducing yield potential in South America, analysts said, while traders continued to watch for any developments in U.S. trade relations with top global soy buyer China.

Wheat firmed on hopes that rising prices in Russia, the world’s biggest exporter, would bolster U.S. exports, while corn futures finished little changed.

Chicago Board of Trade (CBOT) March soybean futures settled up 5-3/4 cents at $9.15 a bushel but stayed inside Tuesday’s trading range (all figures US$).

The CBOT March wheat contract ended up 4-3/4 cents at $5.26 a bushel, breaking through its 100-day moving average, while March corn finished down 1/4 cent at $3.78-3/4 a bushel.

“CBOT soybean futures rallied on the persistent dry pattern in northeastern Brazil/wet pattern in eastern Argentina that continues to threaten South American soybean production,” DC Analysis president Dan Cekander wrote in a note to clients.

Forecasters have been scaling back estimates for Brazil’s soybean harvest due to drought, and hot weather this week was expected to keep some regions dry.

The average estimate of Brazil’s 2018-19 soybean production in a Reuters poll of analysts was 117.06 million tonnes, down from the average in a November poll of 120.8 million tonnes.

Looking ahead to U.S. plantings for 2019, private analytics firm IEG Vantage, formerly known as Informa Economics IEG, projected that farmers would plant more corn and less soybeans and wheat compared to 2018.

The firm put 2019 soybean plantings at 86.2 million acres, up 1.1 million acres from its mid-December forecast, but still down nearly 3 million acres from 2018.

IEG projected U.S. 2019 corn plantings at 91.5 million acres, up from the 89.1 million in 2018. The firm put total U.S. wheat seedings for 2019 at 47.163 million acres, compared with the 47.8 million a year earlier.

Agricultural markets were also weighing prospects for progress in negotiations between Washington and Beijing over their trade dispute. Soybean and corn futures eased on Tuesday on reports the Trump administration turned down Chinese offers this week for preparatory trade talks.

But White House economic adviser Larry Kudlow later denied the preliminary trade meeting was canceled.

CBOT wheat futures were buoyed by tightening supplies and rising prices in Russia and Ukraine after brisk early-season shipments by the Black Sea exporting countries.

A run of import tenders this week also lent support.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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